DMA Makes Second Net Trade Group Acquisition

The Direct Marketing Association earlier this month moved to solidify its role as government lobbyist for the online commerce industry by acquiring the Internet Alliance, a Web-industry trade association.

The two groups expect their combined clout will help them track the "overwhelming flood" of proposed state and federal legislation, a task that has become so time consuming for the Internet Alliance over the last year that it has slowed plans to expand overseas, said Jeff Richards, the Alliance's executive director.

"What we used to face was the problem of disbelief - the idea that [the Internet] would never come to anything," Richards said. "Now we're faced with the challenges of success. Those are not going to go away, so whether it's content-control, privacy or e-mail issues, we must operate from a position of coordination and strength."

The combination of the two associations doesn't involve any money changing hands. Employees of the Alliance, Washington, become DMA staff members, and the New York-based DMA gains the alliance's liabilities and assets, including intellectual property. DMA's members include more than 4,500 businesses in interactive and database marketing from the United States and 53 other countries, while the alliance has 140 member companies.

The acquisition is the DMA's second of an e-commerce advocacy group since October, when it absorbed the Association for Interactive Marketing, Washington. The two additions make the DMA the largest organization dedicated to electronic commerce.

"We've taken this step because the business world has, we think, been awaiting the creation of a strong, industrywide advocate," said DMA President/CEO H. Robert Wientzen. "This acquisition is symbolic of what's going on across the entire Internet industry. Acquisitions … are fueling remarkable growth and innovation."

Generally, the Alliance's membership includes larger companies and more mature businesses, as well as firms whose interests extend beyond e-commerce. The DMA foresees the Alliance taking the role of developing legislative and regulatory policies, while AIM focuses more on helping Net startups and entrepreneurs with education and networking.

Ben Isaacson, acting executive director of AIM, said he doesn't expect the lines to blur between AIM and the Alliance, both of which will operate as independent subsidiaries. The Alliance originally was established in 1982 as the Interactive Services Association and was reorganized last year as the Internet Alliance.

"The IA has been involved with policy for 16 years," Isaacson said. "They're a very old organization. They have relationships on Capitol Hill and, more importantly, on the state level." In contrast, AIM has little or no lobbying experience with individual states, he said.

Executives did not outline specific plans on managing the swelling tide of proposed Net laws and regulations. The DMA first worked with the Alliance two years ago to develop its Online Privacy Principles, a set of guidelines on safeguarding customers' personal information that is designed to promote public confidence in shopping online.

Privacy is a growing concern among Netizens, with 18 percent of Web consumers listing it as their single greatest deterrent to shopping online, up from 9 percent in 1998, according to a study from community site Talk City and conference management firm eMarketWorld LLC, Richmond, VA.

The alliance's board of directors will act as an advisory board for the larger organization.

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